Digital Turbine, Inc. revenue dropped on 18.4% while EBITDA Margin jumped on 10.9 pp from -15.1% to -4.2%
06/12/2018 • About Digital Turbine, Inc. (
$APPS) • By InTwits
Digital Turbine, Inc. reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- The company operates at negative EBITDA Margin: -4.2%
- Digital Turbine, Inc. spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for FY2014-FY2018 is 0.0%. Average EBITDA Margin for the same period was -22.0%
- Digital Turbine, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.5%. At the same time it's a lot of higher than industry average of 0.6%.
- CAPEX is quite volatile: $2m in FY2018, $2m in FY2017, $2m in FY2016, $0m in FY2015, $0m in FY2014
- The company has unprofitable business model: ROIC is -10.9%
- It operates with medium-size leverage: Net Debt/EBITDA is 0.9x while industry average is -2.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Digital Turbine, Inc.'s Revenue dropped on 18.4%. Annual revenue decline showed slowdown in FY18Q4 - revenue decreased on 6.4%. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin surged on 10.9 pp from -15.1% to -4.2% in FY2018. During the last 5 years EBITDA Margin bottomed in FY2015 at -76.6% and was growing since that time.
Gross Margin surged on 18.9 pp from 14.6% to 33.5% in FY2018. During FY2014-FY2018 Gross Margin bottomed in FY2016 at 11.3% and was growing since that time. SG&A as a % of Revenue increased on 2.9 pp from 25.5% to 28.4% in FY2018.
Net Income margin dropped on 44.2 pp from -26.5% to -70.7% in FY2018.
Investments (CAPEX, working capital and M&A)
In FY2018 Digital Turbine, Inc. had CAPEX/Revenue of 2.7%. CAPEX/Revenue increased on 2.4 pp from 0.24% in FY2015 to 2.7% in FY2018. It's average level of CAPEX/Revenue for the last three years was 2.1%. CAPEX as a % of Revenue stuck to a growing trend at 0.51 pp per annum in FY2014-FY2018.
Return on investment
The company operates at negative ROIC (-10.9%) and ROE (-120.5%). ROIC jumped on 15.6 pp from -26.5% to -10.9% in FY2018. ROE dropped on 86.4 pp from -34.1% to -121% in FY2018. ROIC followed a growing trend at 13.4 pp per annum in the last 5 years. During FY2014-FY2018 ROE topped in FY2016 at -32.6% and was declining since that time.
Leverage (Debt)
Debt level is 0.9x Net Debt / EBITDA and Debt / EBITDA. Debt dropped on 45.1% while cash jumped on 107%.
Digital Turbine, Inc. has no short term refinancing risk: cash is higher than short term debt (880.3%).
Management team
William G Stone III "Bill" is a Digital Turbine, Inc.'s CEO. William G Stone III "Bill" is a founder and has spent 4 years with the company. Digital Turbine, Inc.'s CFO Barrett Garrison has spent 2 years with the company.
Financial and operational results
FY ended 03/31/2018
Digital Turbine, Inc. ($APPS) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 24.404 | 28.252 | 86.541 | 91.553 | 74.751 | -18.4% |
| Gross Profit | 7.846 | 6.132 | 9.819 | 13.363 | 25.055 | 87.5% |
| SG&A | 15.347 | 21.964 | 24.772 | 23.348 | 21.211 | -9.2% |
| EBITDA | -13.668 | -21.629 | -14.962 | -13.850 | -3.149 | |
| Net Income | -18.704 | -24.647 | -28.032 | -24.264 | -52.857 | |
Balance Sheet
|
|---|
| Cash | 21.805 | 7.069 | 11.231 | 6.149 | 12.720 | 106.9% |
| Short Term Debt | 0.000 | 3.600 | 10.432 | 0.000 | 1.445 | |
| Long Term Debt | 0.000 | 7.090 | 0.000 | 9.685 | 3.873 | -60.0% |
Cash flow
|
|---|
| Capex | 0.207 | 0.067 | 1.549 | 1.595 | 1.992 | 24.9% |
Ratios
|
|---|
| Revenue growth | 533.0% | 15.8% | 206.3% | 5.8% | -18.4% | |
| EBITDA growth | 31.6% | 58.2% | -30.8% | -7.4% | -77.3% | |
|
|---|
| Gross Margin | 32.2% | 21.7% | 11.3% | 14.6% | 33.5% | 18.9% |
| EBITDA Margin | -56.0% | -76.6% | -17.3% | -15.1% | -4.2% | 10.9% |
| SG&A, % of revenue | 62.9% | 77.7% | 28.6% | 25.5% | 28.4% | 2.9% |
| Net Income Margin | -76.6% | -87.2% | -32.4% | -26.5% | -70.7% | -44.2% |
| CAPEX, % of revenue | 0.8% | 0.2% | 1.8% | 1.7% | 2.7% | 0.9% |
|
|---|
| ROIC | -74.0% | -34.1% | -26.3% | -26.5% | -10.9% | 15.6% |
| ROE | -111.7% | -40.0% | -32.6% | -34.1% | -120.5% | -86.4% |
Digital Turbine, Inc. ($APPS) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 26 | 16 | 23 | 21 | | 8.7% | -30.3% | 2.0% | -6.4% |
| EBITDA | -1 | -1 | -1 | -1 | | | | | |
| Net Income | -4 | -6 | -4 | -38 | | | | | |
Balance Sheet
|
|---|
| Cash | 6 | 6 | 7 | 13 | | -33.0% | -37.7% | 20.6% | 106.9% |
| Short Term Debt | 2 | 2 | 2 | 1 | | -81.5% | | | |
| Long Term Debt | 10 | 7 | 6 | 4 | | | -30.6% | -39.2% | -60.0% |
Ratios
|
|---|
| Gross Margin | 25.3% | 35.3% | 32.6% | 32.8% | | 13.1% | 21.5% | 17.5% | 15.4% |
| EBITDA Margin | -2.4% | -5.1% | -4.7% | -3.0% | | 15.7% | 13.3% | 10.0% | 5.9% |
| Net Income Margin | -16.0% | -40.6% | -16.7% | -183.3% | | 14.8% | -8.5% | -5.1% | -152.4% |
Peers in Application Software
Below you can find Digital Turbine, Inc. benchmarking vs. other companies in Application Software industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| nFusz Inc ($FUSZ) | | | | | 433.3% |
| CloudCommerce Inc ($CLWD) | | -38.1% | 247.6% | 40.9% | 301.1% |
| Seven Stars Cloud Group, Inc. ($SSC) | | 134.7% | 663.8% | 310.3% | 161.7% |
| Aurora Mobile Limited ($JG) | | | | 304.9% | 150.8% |
| Intelligent Systems Corporation ($INS) | | 14.2% | 71.0% | 12.2% | 119.0% |
| |
|---|
| Median (150 companies) | 27.9% | 13.5% | 13.6% | 15.7% | 15.2% |
|---|
| Digital Turbine, Inc. ($APPS) | | 15.8% | 206.3% | 5.8% | -18.4% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Skkynet Cloud Systems Inc ($SKKY) | 99.7% | 97.4% | 98.0% | 97.6% | 96.5% |
| hopTo Inc ($HPTO) | 91.8% | 87.8% | 95.9% | 98.2% | 95.4% |
| Aware, Inc. ($AWRE) | 75.4% | 87.2% | 90.3% | 94.6% | 92.3% |
| Alteryx, Inc. ($AYX) | 77.5% | 80.5% | 81.3% | 83.4% | 91.0% |
| Aspen Technology, Inc. ($AZPN) | 86.5% | 88.7% | 89.7% | 90.2% | 89.9% |
| |
|---|
| Median (149 companies) | 63.4% | 61.9% | 64.2% | 64.6% | 66.0% |
|---|
| Digital Turbine, Inc. ($APPS) | 32.2% | 21.7% | 11.3% | 14.6% | 33.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Aspen Technology, Inc. ($AZPN) | 34.5% | 42.2% | 46.0% | 45.2% | 43.3% |
| ANSYS, Inc. ($ANSS) | 45.9% | 45.8% | 45.1% | 41.9% | 41.4% |
| Paycom Software, Inc. ($PAYC) | 15.1% | 19.5% | 35.1% | 34.4% | 35.9% |
| j2 Global, Inc. ($JCOM) | 41.6% | 40.6% | 41.7% | 36.5% | 35.7% |
| Adobe Inc. ($ADBE) | 17.5% | 25.9% | 31.2% | 34.2% | 35.3% |
| |
|---|
| Median (151 companies) | -10.1% | -9.4% | -4.7% | -3.3% | -3.1% |
|---|
| Digital Turbine, Inc. ($APPS) | -56.0% | -76.6% | -17.3% | -15.1% | -4.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| TimefireVR Inc ($TFVR) | 0.0% | 350.5% | 4.3% | | 1,021.9% |
| MGT Capital Investments Inc ($MGTI) | 0.0% | 36.5% | 221.4% | 129.8% | 344.5% |
| Integrated Ventures Inc ($INTV) | | | | | 199.9% |
| ShotSpotter, Inc. ($SSTI) | | 18.3% | 28.9% | 27.1% | 24.3% |
| Ellie Mae, Inc. ($ELLI) | 12.3% | 20.6% | 16.7% | 21.1% | 19.4% |
| |
|---|
| Median (152 companies) | 2.8% | 2.7% | 3.0% | 2.3% | 2.4% |
|---|
| Digital Turbine, Inc. ($APPS) | 0.8% | 0.2% | 1.8% | 1.7% | 2.7% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| InsPro Technologies Corp ($ITCC) | -558.9% | | | | 127.4% |
| Manhattan Associates, Inc. ($MANH) | 64.8% | 78.7% | 99.3% | 102.5% | 80.9% |
| Intuit Inc. ($INTU) | 34.2% | 23.7% | 52.1% | 72.6% | 66.8% |
| Aspen Technology, Inc. ($AZPN) | 133.4% | | | | 58.1% |
| Paycom Software, Inc. ($PAYC) | 16.7% | 30.5% | 75.4% | 51.1% | 47.5% |
| |
|---|
| Median (178 companies) | -14.2% | -11.2% | -9.2% | -10.2% | -9.1% |
|---|
| Digital Turbine, Inc. ($APPS) | -74.0% | -34.1% | -26.3% | -26.5% | -10.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Upland Software, Inc. ($UPLD) | | | 16.4x | 115.6x | 16.7x |
| Nuance Communications, Inc. ($NUAN) | 7.9x | 5.7x | 5.3x | 7.1x | 15.2x |
| Asure Software Inc ($ASUR) | 3.4x | 4.5x | 3.6x | 9.5x | 14.5x |
| SS&C Technologies Holdings, Inc. ($SSNC) | 1.7x | 7.3x | 4.6x | 3.1x | 8.5x |
| Avaya Holdings Corp. ($AVYA) | | | | | 7.4x |
| |
|---|
| Median (70 companies) | -1.4x | -1.0x | -0.9x | -0.8x | -0.7x |
|---|
